Scan
your Balance Sheet for the following accounts: Undeposited Funds, Accounts
Receivable, and Accounts Payable. Do these account balances "look" right?
Undeposited Funds should be the amount you have not yet moved to the bank
account, maybe a week's worth of deposits. Accounts Receivable should be
what your customers owed to you, in total, at December 31, 2008. And
Accounts Payable should be what you owed to your vendors at December 31,
2008. In other words, Accounts Payable should be the bills you keyed that
you had not paid yet at December 31.

Undeposited
Funds

Accounts
Receivable,

Accounts Payable

Also
look at how you record business expenses paid from your personal funds or
personal credit cards. If you are not recording these, you are most likely
missing tax deductible business expenses. These expenses can be recorded
in different ways, depending on your business structure, e.g., as a loan
from you to the business. If you take out a personal loan from a bank and
put the money into the business you need to record that also. It is not
income. Ask an accounting professional how to record these transactions
because the recording will differ depending on your business structure,
etc.

Moreover, you need to record transactions if you pay personal
bills from business funds. If you are a sole proprietor, for example, you
can record these transactions as an Owner's Draw (found in the Equity
section of the Balance Sheet). Here again, ask an accounting professional
how to best record these transactions for your
situation.

Finally, reconcile your bank statements in
QuickBooks within a week or two of receiving them each month.
Reconciling will ensure that at least the "cash" side of the entries you
recorded are correct, i.e., checks you wrote and deposits you recorded.
And, if you wait too long to discover a bank error or missing funds, you
may not be able to correct the problem with the bank. Many banks give you
just 30 days from the day you receive your bank statement to report a bank
error or file a claim against a third party.

is the amount you key
as Bills that you owe to your vendors. Accounts Payable (AP) will be
larger than it should be if you are not using Pay Bills (under Vendors) to
write checks to your vendors. The common mistake here: recording Bills and
creating AP (this part is correct), but paying the bill using Write Checks
and recording the expense again. This overstates your expenses and
AP.typically the amount your customers owe you, can sometimes be a
negative amount on the Balance Sheet. In this case, either you owe your
customers, in total, more than they owe you (which is not likely), or you
have recorded transaction(s) incorrectly. Conversely, the amount in
Accounts Receivable (AR) can be much larger than the actual AR if you are
creating Invoices in QuickBooks but not depositing the payments in Receive
Payments (under Customers).is a QuickBooks generated account that shows up
on the Balance Sheet as an Asset. The account is typically the default
account where QuickBooks records your bank deposits until you go to
Banking, Make Deposits to allocate the money to the appropriate bank
account. If you have Undeposited Funds on your Balance Sheet and are not
systematically moving the funds to your bank account, your Bank and
Undeposited Funds accounts are both incorrect.

We are a tax and accounting firm in Huntsville Alabama with a strong focus on helping small businesses reduce cost associated with taxes and to assist individual maximize their tax return. Some of the accounting and tax areas in which we are profficient includes, payroll taxes, quaterly and yearly reports, estimated tax, Late Filers, financial statements, income tax return and payroll processing and general bookkeeping. We are familiar with Peachtree, Quicken, CMS and Quickbook.